Canada's early petroleum discoveries took place near population centres or along lines of penetration into the frontier.
The first oil play, for example, was in southern Ontario. The first western natural gas discovery occurred on a Canadian Pacific Railway right-of-way. The site of the first discovery in the far north, the 1920 Norman Wells, Northwest Territories wildcat, was along the Mackenzie River, at that time the great transportation corridor into Canada's Arctic.
From those haphazard beginnings the search for petroleum spread to the fringes of continental Canada – and beyond those fringes onto the ocean-covered continental shelves.
Exploration in those areas involves huge machines, complex logistical support systems, and large volumes of capital. Offshore wells in the Canadian sector of the Beaufort Sea have cost more than $100 million. Across the International border, a well drilled in the US sector of the Beaufort – Mukluk by name – cost $1.5 billion, and came up dry.
For the petroleum sector, Canada's geographical frontiers are the petroleum basins in northern Canada, in the Canadian Arctic Archipelago, and off the coast of Atlantic Canada. These areas are difficult and expensive to explore and develop, but successful projects can be profitable using known production technology.
As the world's onshore oil reserves deplete, offshore resources – in Canada, also known as frontier resources – become increasingly important. Those resources in turn complete the full cycle of exploration, development, production and depletion.
Some frontier crude oil production – for example, Bent Horn in the Arctic and the Panuke discovery offshore Nova Scotia – have already been shut down after completing their productive lives. Similarly, some natural gas fields in the frontiers are now in later stages of decline.
In part, this history illustrates how important changes take place in the economies of newly producing regions, as frontier exploration shifts from wildcat drilling through oil and gas development into production. It also explores the ingenuity needed to drill in those inhospitable areas, and the deadly challenges explorers sometimes face.
True North
Norman Wells
The first great story in Canada's exploration of the geographical frontiers is that of Norman Wells in the Northwest Territories. During his voyage of discovery down the Mackenzie River to the Arctic Ocean in 1789, Sir Alexander Mackenzie noted in his journal that he had seen oil seeping from the river's bank. R.G. McConnell of the Geological Survey of Canada confirmed these seepages in 1888. In 1914, British geologist Dr. T.O. Bosworth staked three claims near the spot. Imperial Oil acquired the claims and in 1918–1919 sent two geologists of its own, and they recommended drilling.
Led by a geologist, a crew composed of six drillers and an ox (Old Nig by name) later began a six-week, journey northward by railway, riverboat and foot to the site now known as Norman Wells. They found oil – largely by luck, it turned out later – after Ted Link, later Imperial Oil's chief geologist, waved his arm grandly and said: "Drill anywhere around here." The crew began digging into the permafrost with pick and shovel, unable to put their cable tool rig into operation until they had cleared away the mixture of frozen mud and ice. At about the level they encountered their first oil show. By this time, the river ice had frozen to and the mercury had plunged to . The crew decided to give up and wait out the winter. They survived, but their ox did not. Old Nig provided many a meal during the long, cold winter.
Drilling resumed in the spring and a relief crew arrived in July. Some of the original crew stayed around to help the newcomers continue drilling. On August 23, 1920, they struck oil at . The world's most northerly oil well had come in. In succeeding months, Imperial drilled three more holes – two successful, one dry. The company also installed enough equipment to refine the crude oil into a type of fuel oil for use by church missions and fishing boats along the Mackenzie. But the refinery and oil field closed in 1921 because northern markets were too small to justify the costly operations. Norman Wells marked another important milestone when in 1921 Imperial flew two all-metal Junkers airplanes to the site. These aircraft were among the first of the legendary bush planes which helped to develop the north, and forerunners of today's commercial northern air transport.